russia Drowning in Sanctions: Internal Estimates Reveal Catastrophic Losses

The Security Service (SAB) of Latvia has disclosed internal estimates from russian government agencies: despite moscow’s high-profile public statements about “successful adaptation”, officials within the country acknowledge that sanctions have already inflicted – and continue to inflict – enormous losses on the economy.

In 2022–2025 alone, russia was forced to spend additional $130 billion – about $32.5 billion annually – to circumvent sanctions and purchase banned Western goods that it previously bought much cheaper directly from the West. According to russian institutions’ internal forecasts, losses from Western restrictions will reach at least another $136 billion by 2030. The total reduction in foreign trade due to the combination of risks may amount to $175.5 billion.

Latvian intelligence emphasizes: these figures are significantly underestimated and overly optimistic. The real impact of sanctions – taking into account indirect consequences such as rising logistics costs, declining corporate profitability, lost budget revenues, and structural problems – may be several times greater. In the energy sector alone, potential losses over five years are estimated at $216.5 billion if the EU imposes a full embargo, and China, India, and Türkiye reduce their purchases of russian oil and gas.

Exports of key commodities are already showing a catastrophic collapse. Iron ore exports have fallen by 40% (from 28 million tons in 2021 to significantly lower volumes). Ferrous metals are down by 20%. Chemical products are down by 35%. Timber and pulp have been hit the hardest – down by 50%. russian analysts themselves admit that despite all the propaganda, it will not be possible to restore these markets over the next five years.

The complete breakdown of trade with the EU has been especially painful, costing russia about $70 billion. Western secondary sanctions are making russia a “toxic” partner even for countries in the Global South: China, India, and Türkiye are increasingly reluctant to risk falling under the sanctions and are avoiding a large-scale reorientation of trade.

SAB states explicitly: sanctions effectively limit moscow’s financial and technological capabilities, undermining its ability to finance the war in Ukraine and rearmament. The kremlin continues its aggressive policy because the domestic system and propaganda do not allow for acknowledging reality. Any easing of sanctions will only accelerate russia’s remilitarization and strengthen support for anti-Western regimes.